Pakistan hopes for generalized system of preferences extension as European investors pour in

Sajjad Karim, a member of the EU Parliament, has commented that Pakistan is on the right trajectory to gain an extension in its GSP plus status granted in 2014.

“I am confident Pakistan is on the right path towards maintaining Generalised Scheme of Preferences (GSP) Plus status, but to achieve that Pakistan must continue to meet the targets that are a part of it,” said Mr. Karim, while meeting with a Pakistani contingent in Brussels.

The GSP Plus status, granted from January 2014, permitted nearly 20 percent of Pakistani exports to enter the 28-member countries of EU bloc at zero tariff and 70 percent at preferential rates. Pakistan was among the nine countries, including its textile rivals Bangladesh and Sri Lanka, which won the GSP Plus status.

According to All Pakistan Furniture Export’s Association, the total furniture exports of Pakistan amount to $2.5 Billion, most of it being crafted in central Punjab cities like Chiniot and Gujranwala.

Premier Shahid Khaqan Abbasi last week directed authorities to ensure continuation of (GSP) Plus, for primarily strengthening the country’s textile export industry, beyond 2018. “Commerce division and relevant foreign missions abroad are to maintain a focused approach towards ensuring continuation of GSP Plus status…,” the statement quoted PM Abbasi as saying at a meeting held to review the efforts afoot to secure the said status down the line.

Pakistan, however, could lose GSP Plus anytime till 2023 for noncompliance with anyone of the 27 conventions related to human and labor rights. A statement received here from Belgium said the delegation handed over evidence on the country’s current state of play regarding GSP+ implementation to Karim, who heads South Asia Trade Monitoring Committee (SATMC) within the European Parliament.

“Last week’s report on the current state of play of GSP+ in Pakistan demonstrated the progress made by the country within the criteria set by the scheme, albeit [there are] areas of improvement [that] still needed [to be addressed].” The statement said the country’s exports to EU had registered 45 percent increase while value-added textile products 88 percent over the past five years.

This highlighted the need for enhancing collaboration with the PFC to promote furniture business in Europe, as stated by CEO Pakistan Furniture Council Mian Kashif Ashfaq while talking to the German and other European furniture producers.

Since Pakistan’s acceptance into the GSP plus club, European companies have been keen on investing into the developing market. Most recently, Hayat Group, a Turkish conglomerate, has announced that it is going to invest $150 million in Pakistan’s ‘fast moving consumer goods segment’ through its subsidiary Hayat Kimya, which manufactures products in hygiene, tissue and homecare categories.

The company is set to first introduce baby diapers, toilet paper, hand towel and facial tissues, the group executive announced on 12th February, saying that Pakistan has immense potential as an emerging market and as the world’s sixth largest population coupled with maintaining friendly ties with Turkey for decades now. The multinational company has nine subsidiaries across the globe, including Pakistan.

The GSP Plus status, granted from January 2014, permitted nearly 20 percent of Pakistani exports to enter the 28-member countries of EU bloc at zero tariff and 70 percent at preferential rates.

“We have great confidence in Pakistan and we believe everyone around the world has a right to access good quality products,” said M A Kiğılı, chief executive officer of Hayat Kimya. “We offer the same Hayat quality as in Turkey, to Pakistan,” he added.Last month, Germany and other European investors expressed interest in Pakistan’s handmade traditional furniture.

This highlighted the need for enhancing collaboration with the Pakistan Furniture Council (PFC) to promote furniture business in Europe, as stated by CEO Pakistan Furniture Council Mian Kashif Ashfaq while talking to the German and other European furniture producers at a 3-day international trade fair Heimtextil 2018 at Frankfurt (Germany). According to All Pakistan Furniture Export’s Association, the total furniture exports of Pakistan amount to $2.5 Billion, most of it being crafted in central Punjab cities like Chiniot and Gujranwala.

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